Hormuz Supply Disruption Tightens LNG Market as Europe Ramps Up Imports to Compete for Asian Cargoes
nashnova research
The ongoing Strait of Hormuz blockage has tightened global LNG markets to the highest price since late 2022. European imports have rebounded sharply from their August low and are now competing with Asia for flexible US cargoes — a contest set to intensify as winter approaches.
How tight is the global LNG market right now?
Before the Iran war, the Persian Gulf supplied roughly one-fifth of the world's LNG. That volume is still offline, pushing prices to the highest since late 2022.
This means → the gap is not a marginal swing. A full 20% of stable global supply has vanished, and prices must rise until enough demand is priced out.
In plain terms = when a shipping lane carrying one-fifth of the world's gas is blocked, prices climb until some buyers simply cannot afford to keep bidding.
Europe's imports are recovering — why is that still not enough?
EU and UK LNG imports (30-day moving average) remain about 4% below year-ago levels, but have recovered sharply from a 30% year-on-year deficit in early August.
The price-arbitrage window for US LNG currently favours Europe over Asia, a pattern expected to hold through October.
Kpler data show Europe is set to absorb roughly one-quarter of global LNG supply in September, up from under 19% in July.
This reflects Europe's deepening reliance on spot LNG — a dependency that began when it replaced Russian pipeline gas after 2022 and has intensified with the Hormuz crisis.
Who is competing with Europe for cargoes?
India is the main rival. Drought has cut hydropower output and fertiliser-plant gas demand is rising, both pushing LNG needs higher.
Kpler forecasts Indian LNG imports in September will grow about 10% year on year. Buyers are snapping up spot cargoes even at prices above their usual procurement threshold.
This means → India is not a price-elastic buyer that retreats when costs rise. Power and fertiliser demand lock it in, and it is willing to pay a spot premium.
Where has northeast Asia's gas gone?
Bloomberg vessel-tracking data show northeast Asian LNG arrivals fell over the same period that European imports rebounded.
In plain terms = global flexible supply — mainly US LNG — is finite. Europe's price advantage let it claim a larger share; Asia received less.
The approach of winter will sharpen the Europe-versus-Asia tug-of-war — whoever bids higher gets the cargo.
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